Electric Vehicle unicorn Ola Electric likely to push back production of e-scooters
- ByTejika Bajaj | December 25, 2021
Electric Vehicle unicorn Ola Electric recently announced that it would have to push back on its production of e-scooters amidst the global chip shortage making it a hurdle for the startup to deliver its promises.
This announcement comes just a couple weeks after the mobility unicorn rolled out its first 100 e-scooters in a ginormous fiesta to mark its presence in the industry. However, the recent development has brought forth criticism for the sustainable startup from both investors as well as the customers.
Hobbled by the global chips dearth, and what analysts call an over-reliance on imported components, Ola Electric’s woes are a microcosm of the challenges that India’s automobile industry will have to navigate as it pivots toward electric vehicles.
The Bengaluru-based unicorn, which has already delayed initial deliveries to mid-December from October, is pledging to fulfill rest of the orders by February. But people familiar said Ola, which counts heavyweights SoftBank Group Corp. and Tiger Global Management LLC as backers, is struggling to iron out manufacturing wrinkles and is able to make only as many as 150 units a day — a slow pace if it has to deliver on time the 90,000 orders Aggarwal said it had received. The company’s body shop is operating at half capacity and its paint shop isn’t up and running, the people said.
“The chip shortage has been an unpredictable beast for everybody. It’s never a great look for anyone if you’ve got a consumer base that’s not happy with delivery timelines,” said Anthony de Ruijter, a senior associate at U.K.-based global investment research firm Third Bridge Group Ltd. “I would expect this is going to be an issue for the sector, not just Ola Electric.”
With the current backlash, Ola Electric would have to come up with alternatives to ramp up its production capacity to ensure a strong foothold in the industry.
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